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CNOOC Limited Announces 2016 Interim Results

On August 24, CNOOC Limited announced its interim results for the six months ended June 30, 2016.

In the first half of the year, all businesses of the company including exploration and development have made steady progress. Regarding exploration, the company made six new discoveries and drilled 26 successful appraisal wells, among which the company made six new discoveries and drilled 20 successful appraisal wells in offshore China while it drilled six successful appraisal wells overseas. The four projects scheduled to come on stream for the year have been running smoothly, of which Kenli 10-4 oilfield and Panyu 11-5 oilfield have commenced production and the other two new projects are progressing smoothly.

Benefiting from the effective implementation of cost control and efficiency enhancement, the company made remarkable achievements in cost saving in the first half of the year, with key cost indicators lowered significantly. The company's all-in cost was US$34.86 per barrel of oil equivalent (BOE), a decrease of 15.5% year-on-year (yoy), of which, operating cost decreased by 22.7% yoy to US$7.42 per BOE and recorded a decrease yoy for both offshore China and overseas operations.

During the period, the company's total net oil and gas production reached 241.5 million BOE, representing an increase of 0.6% yoy. Net production from offshore China was 160.1 million BOE, with an increase of 2.4% yoy, mainly attributable to the newly commenced projects in Bohai and Western South China Sea. Net production from overseas decreased by 2.9% to 81.5 million BOE, resulting from the shutdown of the Long Lake project by the impact of the incident.

Impacted by the decline of international oil prices, the company's average realized oil price was US$37.70 per barrel in the first half of 2016, representing a decline of 34.5% yoy. The average realized natural gas price dropped by 16.2% yoy to US$5.49 per thousand cubic feet, mainly due to the downward adjustment of natural gas prices by the Chinese government in the second half of last year which led to price cuts of some of the gas fields in offshore China. The company's oil and gas sales revenue were RMB55.08 billion, representing a decline of 28.5% yoy. Net loss was RMB7.74 billion.

Mr. Yang Hua, Chairman and CEO of the company, said, "In view of the challenges from the external environment, the company strives to further enhance its industry know-how and introduce innovative work methods and achieved steady progress in all businesses, with the target of cost control and efficiency enhancement. Keeping modest, we will continue to identify areas for improvement and keep on learning, in order to enhance the first-class competitiveness at the international level. We will strengthen, improve and expand the company to create greater value for our shareholders."  

In the first half of the year, the company's basic loss per share reached RMB0.17. The Board has declared an interim dividend of HK$0.12 per share (tax inclusive) for 2016.

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